Beyond the Two Percent: Rethinking CSR and Sustainability in Chhattisgarh and Odisha

Abstract

Sustainability and Corporate Social Responsibility (CSR) in the last decade has taken the central position of business governance, particularly in India, that has mandated CSR through a legislative provision. CSR in India has primarily been philanthropic in nature, but its shift towards statutory mandate via Section 135 of the Companies Act 2013 has expanded the scope and compelled the companies to implement and report initiatives that they take towards the development of the society. The paper aims to observe the intersection between sustainability and CSR within India’s regulatory and legal framework. It studies the theoretical foundation of CSR, including legitimacy and stakeholder theories to evaluate the extent of the CSR projects contribution to sustainable outcomes. Corporate spending did see improvement because of mandatory two percent of average net profit being spent as CSR fund but continues to lack transparency, even in the presence of framework like Business Responsibility and Sustainability Reporting, CSR has continued to remain merely compliance driven, mostly activities with disproportionate spending and insignificant focus on environment sustainability. The study also aims to highlight the disparity in region wise allocation of CSR funds that keeps environmentally vulnerable states like Chhattisgarh & Odisha at abeyance from receiving the CSR funds. The paper suggests meaningful sustainability reforms consisting of diversified spending of CSR funds, effective impact assessment and deeper integration of CSR and ESG for sustainable development trajectory to be achieved by India.